The Effectiveness of Social Advertising : Evidence from a Large-Scale Field Experiment

Although social advertising has become a major online advertising channel in recent years, its effectiveness is not fully understood. In this study, we use data from a large-scale field experiment with a major social media platform (WeChat Moments) to investigate how the display of social cues (friends' likes) in an advertisement affects users' responses. We randomly manipulate the presence of social cues in ads shown to 37 million users. We distinguish two types of consumer responses: publicly observable responses that reveal whether a user has liked an ad, and private responses, whereby a user clicks on an ad. We find that, on average, displaying the first social cue significantly enhances the liking rate and the clickthrough rate. Nevertheless, although showing additional social cues can further increase users' tendency to like an ad, it does not further increase the clickthrough rate. This empirical pattern is consistent with the interplay between informational and normative social influence in social advertising. Overall, we find that the coexistence of the two forces can enhance the conformity effect on the public liking response. However, when normative social influence dominates, a crowding-out effect on the private clicking response may occur. Our results have implications for advertisers and social media platforms in regard to the design of social advertising policies and social networks